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Jack Divine is founder of the ark And Group and is just definitive on the arc of our Cia, away from the movies, away from all the different silliness is well, and in fact some would say he was actually a character taken by Philip Seymour Hoffman long ago, Jack Divine. Because of limited time, questions are so important here. My memory is our colossal misguests on the intelligence of the Soviet Union. Do we have quality intelligence on Iran?
Well, I hope. So let me put it that way. We're at that point where push comes to shop. There's no doubt in my mind that we have great technical coverage. I also believe we have a force multiplier in Israel. Israel has fantastic intelligence collection on Iran, There's no doubt about it, and I therefore think that we're well positioned to deal with the situation because of that intelligence, and they've shared it amply because it's in their interest in
our interests. So I think we're squaring this one. This is not a I don't see it. There are opportunities for mistakes on this, for sure, but it won't be because they don't have good intelligence.
There's great discussion of the linkage of the Pentagon to the White House. In the White House to the Pentagon. Do you perceive a good use of our CIA intelligence by President t.
This is a controversial issue today because Tulsa Gabbertt went in March, went down the hill and said that the Iranians did not have a nuclear weapon and that was three years before they could deliver it. And that was raised with President Trump yesterday and he said he's really not counting on that information. And so therefore I think
there is a disconnect. Then I guess I would have a cautionary note for political leaders, and that is, if you have a choice between the intelligence community that says we're going to give you nothing but the truth, and you have political leaders and other countries who have a vested interest in presenting facts in a particular way, I
would recommend you stick close to those intelligence estimates. So having said that, there are subset issues in this that I could touch on, which is, for example, we have to be careful and defense of net How's presentation of the situation that is not underestimated. You cannot get this wrong and say that it's not it's not a dangerous situation.
And I would add to that that I think we spend a lot of time thinking about, oh, they won't be able to deliver by a missile, and that's what pushes it out a few years, and I think we need to step back and realize that's not the only way that nuclear weapons can be detonated and can be dangerous. So there's an enrichment point, and once it gets that Richmond point, then the starting gates open. You have to take care of it.
Jack. If the US does get involved here militarily, how do you think the Iranians will respond?
I would not want to be in the Iranian leadership's position. It's like the featherweight fighter getting in with the heavyweight champion of the world and have never had a fight. And I think that's what you're looking at. And you can dance around the ring and jump up in the ropes and you're going to get knocked out, carried out, of the ring in the first round. How do you defend yourself if you have no air defense? I mean, if there is no way to prevent your adversary, and
that would be in this case Israel and ourselves. This thing can only end one way, and I think the guy tools have a great struggle with it. That is, the President United States is saying unconditional surrender that has very specific meanings, and I think that's where we are. And I think for the Iranians the CounterPunch, they might get one in, but all hell will break loose after that. They have nothing to stop the US from flattening, and
the Israel without using nuclear weapons, just flattening. They have no defense. So I think they may turn out to be a little more prudent than they're hopeful, more prudent than their verbiage.
Jack.
I guess one of the initial talking points is that, I guess the FOURD down nuclear site deeply buried under the ground. Does the US have the ordinance to take that out?
All the experts have been practicing this for years. I shouldn't say tens of years, but I mean, you're sort of over the last decade they've been developing the GBU fifty seven and that has the capacity of but not a single shot. This is going to take multiple shots at four to oh to destroy it. But I think we have the capability. Unfortunately, we are the only ones that have it, and we only have They have the
one platform, the B two that can deliver it. So I think if I were sitting in Tehran, I would say goodbye.
Four to oh.
Okay.
I think that's where we are. It's going and you know it's not going to be pretty. I think it's the only alternative. I think I've read, and I know I've read, but that the Israelis believe that there's other alternatives, and if there were, I think we would have said, why don't you use them. I think it's either this or you let them keep developing nuclear weapons. So I think it's we're looking at the endgame here, Jack.
Very importantly, one time for one more question. We'd love to get you on in the coming days and really appreciate your public service for over fifty years. The CIA. We had on the crown Prince in exile, the son of the Shah yesterday this my Global Headlines. Thank you, Danny Berger and Lisa Bramwitz for that, What does I mean you have talked about a partition of Iran, a partition of Iraq. What happens to the greater Persia if this all falls apart? Is it every big nation for themselves?
In some degree? We're in a world where it's every nation for itself, and then you try and find some to build allies. But let me hit what I think is at the core of the shah sons approach and not approach the fact that he's on the scene, and that is the regime change. You know, the question is is Israel going to stop at fourdoh or are they going to push for a regime change. This is an issue that our policymakers are struggling with today as well.
I want to be cautionary. I mean, I see the wisdom of taking an out for one way or the other. In the end, I hope. I wish it hadn't been with America, but I've made peace with that regime change. And my experience over all those years that you refer to is analysts political leaders underestimate how people put up with downtrodden conditions to such an extent, and they can't believe that, Oh if you're an American, you'd rise up in arms. So they overestimate the prospects for regime change.
And I'm afraid that's where we may be here today. I don't see it. There's a lot of angry people with the Shaw, not with the show, with the Ayatola, but there's no armed group inside the country. There's no indication right fourth, there's no split at the very top where you can have a palace coupe. So I think that's the dangerous warders here that we have to void.
Jack Divine, thank you so much. Just public service with the CoA, the ARC and group for decades.
You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from seven to ten am Eastern. Listen on Applecarplay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
Usually anticipated this day, Michael Darta joins us down from ourth capitol. Michael, let me start at the nominal level. It probably won't come up in the press conference, but is the animal spirit there or in risk of lessening? Can we generate with inflation four or even five percent growth?
Well, Tom, I think we're seeing a little bit of slowing around the edges in terms of the nominal economy.
So if we look at some of the tracking estimates for Q two, real final sales to the private sector look like they're sub two percent now, and we've had just over two years of three percent average growth, and so nominal has been up there, you know, five percent plus, which is you know, quite strong relative to the average of the last business cycle that was closer to four and then obviously during the high inflation period twenty twenty one twenty twenty two, we have double digit nominal growth.
So the FED is slowed, not the nominal economy. It's brought inflation, you know, pretty close to target, but we don't want to go too far. And then you know, worry about you know, recessionary risks which have been out there, and you know, obviously the economy has divided those concerns over the course of the last two years. But there is some slowing here. And if nominal is about to run sub four percent, FED policy rate probably shouldn't be above four.
So what we're not seeing, Michael, at least not yet, is inflation. Is there a scenario where maybe some of these tariffs are maybe taking in the margin of certain of corporate America versus maybe the pocketbooks of consumers.
Yeah, that's really been quite a surprise with these benign inflation figures over the last few months. So part of it could be a little bit of a delay. Part of it is that there's a lot of moving parts here. Even with the recent geopolitically driven upward pressure and energy prices, we're still flatish year over year on crude, industrial metals are down year over year. Inflation expectations in the TIPS indexed bond market, you really haven't moved at all. They're
at quite low levels consistent with price stability. So we're not seeing a big tariff fallout so far, and that's actually quite good news for the FED because I think that gives the FLMs more flexibility to ease policy, you know,
in the event that we do seemore slowing ahead. But you're right, I mean, the question is, you know, profit margins, right, I mean, equity multiples are not low, so you know, we could you know, we're probably not looking at really strong earnings growth this year, but markets are really optimistic over a multi year horizon that will have pretty good earnings growth.
And you're suggesting that'll be that'll be a disappointing event, right.
Well, you know, Tom, I'll have to say, I mean I was quite skeptical of this, you know, whole AI revolution. I thought it was a bit overhyped and over baked. But I've kind of changed my view on that. And this is just anecdotal, but just through personal use of these AI interfaces, I mean, there has been a vast and breath taking improvement in what this technology can do, you know, whether we're dealing with health and wellness from
a personal perspective or your favorite macroeconomic modeling. I mean, it's it's like having fifty research assistants at your disposal and you don't even have to be nice to them.
So what is exactly just for me, exactly save this?
Paul Michael, What do you think the FED should say today? What should fit Chairman Jpow's message be today?
Do you think?
Well, you know, I would love if the Chairman would focus on bond market inflation expectations.
I think those are.
More important, and some of the survey data is a bit divergent. You know, we've seen a lot of upward pressure from the U of MISH data, but not so much out of the New York Fed. But I really believe these indexed bond spreads are the key. And if we remember back to last summer, when it looked like the labor market was really losing steam in a dramatic fashion, those expectations started to tank, but they recovered when the FED started to lower policy rates. So the FED has
just nailed it here. I mean, they've really pulled a rabbit out of a hat in terms of raising rates, sufficiently holding them there, and then seemingly cutting them just at the right time. Even the pause, which some think, you know was political based on the timing of the election, I think is perfectly justified based on the macro data
and the behavior of bond market inflation expectations. So I would love if Fed Shair Poul would give some additional credence there, But I won't be holding my breath for that. I think he's going to hold it close to the basket. We'll see what these updated projections say, but I'd be kind of surprised if the FED was the Fed in the in the market expectations were seriously far apart at this point. I think they're fairly close.
Pa.
I'll get one. We're in here with Michael Darta, but I just went to Google Gemini Elboy and I typed a linear rational expectations model, which Darta was expert at the difference equations of when he was at Wisconsin as well, And just like he says, it lays out an incredible six paragraph summary including DSGE models. And we have Clarita today on the ferryating. I mean, you're right, Michael, it's just it's jaw dropping what they're doing.
Michael.
Do you think this US economy can have I mean it appears that we've a we've had that soft landing. The question I think for a lot of people is in a world of higher trade tariffs, does that threaten that soft landing at all? What's what's your GDP view here?
Yeah, I think we're in a trend growth economy and that is by definition of soft landing. But at the margin, the risks are probably to the downside here. You know, you guys were just talking about the messy real estate market and it's been messy for a while. But you know the risk with these tariffs is that we're self imposing adverse supply shops in an economy that is really benefit from a weakening of the supply side, right. I mean, you know, early in the pandemic recovery, we were getting
negative productivity growth for about two years. Over the last two years we've seen much better numbers close to or above two percent. And that doesn't really even tell the AI story yet. That was really just a rebound from the pandemic oriented his stores. So you don't want to do anything that interferes with the supply side, and the terriffs are going to be a headwind there. I think the AI story is going to be much more powerful
over the longer term. So as long as the FED doesn't fall drastically behind the curve here, Paul that I think you know that you can have good economic outcomes.
So, Michael dart I got a run in the war. Thank you so much on this FED day for joining us. Mister Darta is with Roth Capital.
Look, this is the Bloomberg Surveillance Podcast. Listen live each weekday starting at seven am Eastern on Apple Coarclay, and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa Play Bloomberg eleven thirty.
This is a joy and hugely anticipated win. Thin is out of the Columbia Georgetown brandeis axis and particularly Columbia University. He's global out of market strategy for Brown Brothers Harriman. But he is definitive on the Pacific RIM. Wait, let's just start, doctor Finn with the basics of the Pacific Rim. Not not your Burma, but you know, North Singapore and on up north. The currencies are screaming. Taiwan dollar stronger,
sing dollar almost down, New Reason strength as well. It's asymmetric. Is this about dollar weakness or is this about Pacific RIM success?
First of all, Tom, Paul, Lisa, thanks for having me. It's always a pleasure. I would say there's a lot of moving parts. Much of it I think is to all weakness, but there's also as you know, there's rumblings out of these trade talks that the US would like these currencies to be allowed to strengthen. We've heard that out of Taiwan, We've heard that out of Korea. It's
been reported and denied. But you know, I think where there's smoke, this fire, so there's it fits into the underlying sort of market view that this administration wants a weaker dollar pretty much across the board, and it's part and parts of.
The whole trade talks. You know.
That's not to say, you know, these these countries aren't doing well.
Of course they are.
There's some issues with obviously with China and supply chains and things like that, but overall, the fundamental story remains quite solid.
So these currencies could strengthen, especially.
If this if this dollar weakness picks up after today's what I think will be the expected dubbish hold.
So when what do you make of this US dollar We've seen after the initial sell off and risk assets or this year on Liberation Day we saw that, I don't know, the US equity markets kind of retrace all the selloffs, but we've not seen a rebound in US dollar. Is just just a normal ten percent pullback on a on a rich currency. Is there something else going on?
Well, Paul, you know, if you you know, asked me at the beginning of the year, you know, I was, you know, dollible coming this year.
We had sort of the economy fire all cylinders, the FED hawkish et cetera, et cetera, deregulation, but really to your point, liberation.
Liberation Day was really game changer.
It was it was I think the realization by the market is that the policy making out of this administration was unpredictable. Uh and really and to me unexplainable, inexplicable. And I think it's been a lot of confidence in the dollar.
Since then.
We had so much back and forth on terrfs, on fiscal policy. It's it's really been, you know, a sort of game changer since April second, and then April ninth, Uh, the tariff announcements.
So yeah, I've changed.
I think the dollars is in for a weaker spell, especially again with the US comomy star on SHOs and cracks. That's why I think the FED is going to deliver a dubbish hole today. Tariff uncertain continues, fiscal uncertain continues, so all the elements are there for a week of dollar.
Is a FED speaks today in the press conference on all Doctor Thinn. One of the things here is everything's unilateral discussion. The president, let's make a deal. Tim O'Brien coming up in a big folks or maybe bilateral and all of your academics is it's a multilateral world. Are we just going to see them shift their US exports through Singapore. Dare I say, through your Burma? I mean, are they just going to conduit their exports through other geographies?
Well, I do you know? That's good question, Tom.
I do know that the US is an alert for giants or sort of re export through Vietnam and sort of other proxies.
It can be done, but it'll be difficult.
What I think to me is get back to this bigger story about the dollars that the US is really is pulling inwards. It's becoming they call it America first, it's whatever you want to call it. It's isolationists. It's leaving a vacuum for other countries. I think China will will so exerts a greater influence, especially in the Pacific Rim in Southeast Asia. We have eur Zone becoming a bit more cohesive and perhaps picking up the ball over
in the European sphere. So you know, it's a long you know this, We could talk about this for hours, but in seat of geopolitics, we.
Could be coming into this sort of multipolar world.
Which is doll The US really has pulled back and allowing others to come into this vacuum. Again, that's part and parts of the weeker dollar I think as well.
Marcus move the yield comes in in two basis points four point three six percent. We have economic data and housing starts. There was a bit of a positive revision, but there's a grim statistic and housing starts. In building permits here the survey negative zero point eight percent, round it one percent, negative one percent. It came in at negative nine point eight percent, found it negative ten percent, huge miss and confirmed with building permits as well, which
were to be flat. The survey was zero point zero and they came in negative two percent as well. Claims pretty much on track is well. Four week moving average lifts up from two hundred and forty one thousand up to two hundred and forty five thousand. So there's the economic data. Maybe it doesn't matter in a FED day, but it's there. And again that we'll be there at one point thirty giving you the FED press conference as such, Paul.
When we saw earlier in the year, when there was this vul volatility in the in the US markets, a movement of capital over to Europe, particularly equities, people kind of buying into these European equities and now we've got European indites doing better than US. Is that simply a short term trade or is that something more fundamental?
Do you think? Yeah, Paul, I think, uh, there's a million dollar question.
My gut feelings, it's it's it's a it's a serious rotation out of the US. Again, everyone was was long US equities dollar at the beginning of this year, but since the year began, we've got we had some good news out of Europe, the fiscal sort of developments in Germany, some improving sentiments in the case out of most of Europe, at the same time that the US is starting to soften up. So I think it's it's a cyclical shift.
I wouldn't say it's structural. I think it's too early to say, but certainly a cyclical shift shift rotation from the out of the US into the into the.
Europe and other areas.
And that's reflected in the in the equity market app performance as.
Well as the currency performance.
A weaker dollar, you know, right now, it's sort of sell sell a dollar by everything else. And again I don't see anything on the on the survive and change that very much, Thank you so much.
Whin sents with Brown Brothers Harriman.
This is the Bloomberg Surveiller Podcast. Listen live each weekday starting at seven am Eastern on Applecarplay and Android Auto with the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal.
Fosio Paulta Guzman joins right now to say she's with Energy Vista. Barely describes her expertise and something we don't talk enough about because Paul and I flunk the physics of LNG liquefied natural gas. Her research note is so valuable we protect the copyright of our guests. Get her note from Energy Vista. Leslie thrilled to have you in here for a brief at today. What are they thinking about? And Cutter They're not worried about the World Cup right now?
Am I right? They own Arab leng and are they at risk because of this war?
So I think Katari is one of the most vulnerable player right now in the region because it depends on the strait of hormones to evacuate all its anti shipments. That's one second. We had a strike from Israel on sasparse number fourteen a few days ago, which is a share field between Katar and Iran, although it's the further away from Katar, right, and it's a domestic it's a
field for domestic consumption within Iran. It shows the capabilities and the highest you know, we're at the highest place in terms of tension for potential infrastructure hit in the region.
That Morse sat in your chair there, yeah, two days ago. I believe it was a giant and geopolitics and analysis of this, and he said the media is missing the LNG study, the natural gas study briefest now on the fragility and the outcome of a busted LNG market if this war expands.
So, Katari is one of the world's largest LNG exporter around the world. The US is the first one, Katari the second one. Katari is standing most of its gas right now to Asia. Eighty percent of its energy goes to Asia, twenty five percent to China. So any major disruption of Katar is a major heat for the market.
Less so right now for Europe because since the Hussy have been relatilessly attacking shipments in the Red Sea, Katari is you know, only maybe exporting one bcm a month to Europe, but the basically the disruptions would be mostly for Asia, and this is what this would be a major heat. I would say that we're in a very soft place right now in terms of demand in the global gas market. There is ample supply coming online, but still you will not you will notice it with pricing.
You know.
What I would say is that there are still many unknown in this. In the coming days, the oil and gas market will brace for further impact in terms of shipping disruptions and potential further attacks on energy infrastructure if things escalate.
What are the shipping companies telling you about how they're preparing for I mean, God forbid the straight of Her moves, there'll be some tension there. But even other shipping lanes that are critical to the movement of liquid loquified natural gas and crude oil.
What are they telling you?
So most of the shipping companies right now are avoiding as much as possible the East Mediterranean, the Suiss Gulf, the Red Sea. They were already avoiding it, and the Persian Gulf because we've seen some infrastructure hits in the East Mediterranean. The High Far High Farm refinery was a hit. Now the Levayettan field in Israel is shut down as precaution. We've seen also, as I was mentioning earlier, some hits on other infrastructure. But I would say that so far
we've seen restrain regarding energy infrastructure. That could change if things go south.
We're running out of time. This is too important a question. I believe the President was in Qatar. I believe he was shopping a new air force. One. I guess we're making nice, We're doing the World Cup, whatever the moment is, and Qatar is I guess the path of conversation from Tehran to the Western world. What will you listen for from Qatar and from Tehran in that communication to the Western world.
So it's just three scenarios right now. One is the US joined the fight and want to finish the job because both I think the US and Israel understand that since October seven, the head of the octopus is Iran and nuclear power in Iran would be too dangerous for
the world. Second is the nuclear talks potentially what Qatar would prefer, meaning we go back to the table, we negotiate, and it would be a safe the face strategy for Iran and say basically the only option to save the region maybe now, and third would be total rog going rogum and maybe going with nuclear breakout with whatever is left of nuclear or going after many assets from the US and energy, infrastructure and neighbors.
Thank you so much, really appreciate this. A senior non resident Fellow the Center for Strategic in International Studies, lestic politic Gosman joins US from Energy Vista.
This is the Bloomberg Surveillance Podcast. Listen live each weekday starting at seven am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa play Bloomberg eleven thirty.
Well, can Lisa top what she did yesterday on news?
I it was pretty solid, So she's got a good line up here today.
Oh I like it.
I like the leads.
You get a pre email. I don't get a email.
Yeah, I can approval, please you and Paul brief me on the newspapers.
Okay, we're starting with the Dallas Foy cheerleaders.
That's how I fall like sid Oh.
Really, yes, they got a big pay raise. I like this story A roughly four hundred percent increase for the twenty twenty five season. It was revealed episode seven they have the second season of the Netflix docu series. They have one about the show. It's called America's Sweethearts Big Hit. I actually watched a few episodes out of a full disclosure. There wasn't any information about what they were making before how much they're going to be paid under the new deal.
But The New York Times did speak to a former cheerleader who said in twenty twenty four, it was her fifth year in the squad. She made about fifteen dollars an hour, five hundred dollars for each game appearance. So sometimes they're saying the mascots make more than the cheerleaders. But what's still missing is health insurance. But what they're saying is that it's really putting it out there. So now, because of this increase, cheerleaders from other teams could be set for an inert time job.
I mean, there's what sixteen games, eighteen games?
Yeah, I don't know. I think they get paid by the game, right, they.
Get paid by the game and per hour, like.
Have full time jobs.
And that's what you see in the series is how they're all struggling, like they're working this job, working that job, and doing all this stuff just to be a part of the art.
Cheerleader.
Ever, next you go, all right, since we mentioned that Netflix series, I want to stick with Netflix. And this is interesting. Is it kind of a sign of what's to come? Because Netflix struck a deal with to show linear TV for the first time. It's going to add live television channels shows from French broadcaster t F one. So what French customers will be able to see is
live feeds, including sports from TF one's channels. They'll be able to stream their shows on demand, dramas, reality shows like The Voice that they.
Show the French signal will be free on Netflix.
Correct.
There's no word though on how subscription advertising revenues are going to be shared between the two companies, or how much Netflix if they paid for like an upfront fee for the content. But it's kind of a start to something interesting.
Most of the news you had earlier a week or so ago that in the May month of May, streaming viewership exceeded that a broadcasting cable television in the US. So that's the trend right before us.
So would we see that here, yes you will.
Yeah.
Interesting.
Interesting.
And the last one is about private space stations. They could become the next travel destination. So instead of going globally to France or wherever you want to go, you can go to space maybe pretty soon. There are a lot of companies looking to build these facilities. Making them is pretty expensive, so the Wall Street Journal kind of listed it. Some of them, like Axiom spaces Station could someday hosts as many as eight people, five different modules
you can orbit above the Earth. It's going to cost them about three billion dollars oh to make.
And then you have just.
Besos' Blue Origin their mind a station cord orbital reef that could be coming orbital reef. Yes, if you would like to stay, NASA says SpaceX is also investigating using its starship as a possible low Earth orbit destination too, And then they're star Lab. They're back by Voyager technology. So it's all these companies that are.
Running the mode.
I mean they go up, they don't go up to orbit, I mean, excuse me, kind of, it's kind of it's exactly right. But now they're going to go into orbit on a space station.
And stay for a vacation vacation.
Yeah, it's not just tours, of course, it's also you know, different astronauts and scientists and research and things like that. But it could be open to tourists as well.
Okay, thank you. I'm just trying to thank a lease audition for the Giants. Yeah, you're leading this fall.
Yep, the Jets or the Jets do have a good flight spud.
There, Lisa Matello, thank you so much. That is the newspapers.
This is the Bloomberg Surveillance podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live each weekday, seven to ten am Eastern on Bloomberg dot com, the iHeartRadio app, tune In, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal